The Mexican peso is riding a wave of emerging-market optimism to trade at levels last seen when Donald Trump was a longshot to win the presidency. After seven straight days of gains—the longest winning streak since 2012—the peso touched 18.03 per dollar on Tuesday, the strongest since August, when Trump was a candidate pledging to tear up trade agreements and build a wall along the Mexican border. His election sent the peso into a record-breaking tailspin as traders fretted about the effect on Mexico’s economy, but the losses since the Nov. 8 ballot have now been erased. With the Trump administration occupied by a domestic agenda focuses on taxes and healthcare, and after comments about trade that seemed more favorable toward Mexico, investors see it as less likely to pursue a damaging renegotiation of the North American Free Trade Agreement. That’s helped make the peso the best performer among major currencies this year as it climbed 15 percent, while volatility tumbled. Trump’s power over the peso “has diminished greatly compared to what we saw during the campaign and until he took power,” said Juan Carlos Alderete, a foreign-exchange strategist at Banorte-Ixe in Mexico City. The expectation now is that “Nafta renegotiation will leave things at least broadly unchanged.” Mexico has been increasing interest rates and the peso has posted the best trade return in the world this year for carry-trade investors, who borrow in countries with low interest rates to invest where yields are higher. Traders also appreciate that one-month volatility is now near the lowest since the end of last year, according to Christian Lawrence, a strategist at Cooperatieve Rabobank UA in New York. Trump’s anti-Mexico rhetoric “is probably nearly all out of the price,” he says. “Carry has been a huge driver.”